When was the last time you pulled your homeowner's policy out of the drawer and made sure it covers every valuable item that could be lost, stolen or destroyed by fire? When was the last time you updated your list of valuables? Does your policy include flood insurance? Most of us look for the best buy we can get on homeowner's insurance. Then we forget about it, except to pay the premium each year. In fact, your policy needs to be updated every 12 months. With inflation always a factor, the silverware you paid $100 for a year ago could be worth $200 today. And how many large-ticket items – a VCR, a new air conditioner, a fancy computer and printer, a music synthesizer, a new fur coat - have you bought since that first policy list? Armed with my list of questions to ask an insurance sales, you will be able to get a policy that covers your cash, your guests, perhaps even your Steinway grand piano. And you will know when it is better to keep valuables in a safe-deposit box than in your San Diego, California real estate.

THE SEVEN BASIC POLICIES
You can shop for insurance more intelligently by familiarizing yourself with the insurance industry's lingo. The industry categorizes its policies in seven basic forms. Each begins with the letters HO, standing for "home owners." Grasping the difference between HO-1 and HO-5 can help you sidestep the classic mistake - underinsuring your residence.

1. "Basic" policy HO-1 covers fire, lightning, windstorm, hail, explosions, riot, civil commotion, aircraft crashes, vehicle damage, smoke, vandalism and malicious mischief, theft and breakage of glass constituting a part of the building. Although this is the least expensive, I advise you to avoid this policy. It does not offer enough.
2. HO-2, called the "broad-form" coverage, includes the losses mentioned above, plus an additional seven: falling objects; weight of ice, snow or sleet; collapse of buildings; sudden and accidental damage to a steam or hot water heating system, or to appliances for heating water; accidental discharge, leakage or overflow of water or steam from a plumbing or air-conditioning system, or from another appliance using water; freezing of plumbing, heating or air-conditioning system; and sudden, accidental injury from artificially generated currents to electrical appliances such as stoves or refrigerators but not television sets.
3. HO-3, the "special form," gives you maximum protection for your residence but skimps on coverage of personal belongings.
4. HO-4 is strictly a tenant policy for those who rent rather than own. It gives you comprehensive coverage of personal property and liability, but there is no coverage of the structure itself.
5. HO-5, the "comprehensive" form, is the minimum that I recommend for homeowners. This policy puts the burden of proof on the insurance agency where damage is concerned. It is an "all-risk" policy, costing 35 to 45 percent more than the HO-2. However, the peace of mind in the coverage is definitely worth the price.
6. HO-6 is for condominium owners. It covers everything within the space occupied.
7. HO-8 (there is no HO-7) is a special policy for older San Diego, California real estate. This expensive policy is for homes with distinctive workmanship and details that cannot be duplicated. It is useful for a home so valuable that it cannot be replaced under the "replacement-cost" approach. But you pay an extraordinarily high premium. Under this policy, you are paid for the replacement of your house at its actual cash value. For example, if you owned a historic landmark in downtown Boston, with 1,200 square feet, it is worth more than an equivalent space because of its historic value.

COVERING ALL THE BASES IN NEWLY BOUGHT SAN DIEGO HOMES

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